Damage to the public purse; the abuses that see a drain on taxpayers monies and concerns the Authority is not in control.
Many receiving/handling these claims, either as adjusters or the insurers themselves, seek to settle, sometimes, on agreed reductions as, sub-£10,000, they are costly to defend … an economic decision to settle is made as costs are not recoverable sub-£10k. We do not production-line these claims but consider every facet in detail – we can evidence exaggeration/misrepresentation in almost every aspect of a Kier Highways claim. Whilst complicated for others, our 10+ years of experience makes us adept at identifying anomalies.
21/06/2016, the facts were conveyed to Sarah Green, the then Green Claims manager at Highways England. We met in person and KPMG were appointed to audit Kier – the facts, conveyed to KPMG can be read here https://www.englandhighways.co.uk/kpmg-overview/
- Multipliers of Kier Operatives Rates
Kier is misrepresenting to Third Parties (drivers, fleets, hauliers or their insurers) and the Courts that the uplift after 5pm of a weekday is a cost they pay to operatives whereas it is not.
We attended 3 court hearings and heard Kier give evidence in the name of Highways England, the contractor’s employee who put the 10/2015 (multiplier) in place, Sophie Granville’s misrepresentations were such to the Court that we obtained the transcripts. For example:
- Question: COUNSEL FOR THE CLAIMANT:
“What are multipliers used for? Maybe just explain that.”
- Answer Ms Granville:
“It’s used to reflect the overtime paid for by the teams so, effectively, with the staff we have a contract that says out of hours and certain days it’s paid at a higher rate than obviously during the contractual hours and overtime on a weekday evening is different again. “
But simpler still, Ms Granville made a statement which the defendant’s lawyer picked upon:
- MR. MARSDEN:
“Now, at paragraph 24 in your statement you say:
“Multipliers are used for staff who are called in out of hours. They cost us the same multipliers (inaudible) 1.5 for night work Monday to Thursday.
But staff are not paid the higher rate. This is the simple fraud and it occurs on 1,000’s of claims – it is an uplift applied to an exaggerated rate.
The fraud uncovered is, on the face of it, an issue for insurers. However, fleets and hauliers may also be faced with these claims if handling demands for payment themselves, as many have an excess that runs into the £1,000’s. A commercial policy could well see these claims adversely affecting a company’s premiums or bottom line – they have a potential for greater impact upon a business.
These are demands made in the name of a Government body – why would anyone believe they were being fleeced in the name of a Public Authority, why is this permitted?
I doubt anyone at the Authority or contractor thought someone would have the time or inclination to put the pieces together, that they expected unquestioned payments to continue.
Why has Highways England not put a stop to the contract non-compliance, exaggeration & fraud?
I believe the answer is simple; they cannot. The Authority appears complicit, compromised, unable to act, polarised. From a claim (above) perspective, I suspect there are internal worries playing on the mind of those involved – acting in concert with a contractor, contempt of Court, malfeasance and that the Authority may ultimately be liable for £millions demanded and extracted in their name by profiteering contractors. The Authority has enabled and permitted these activities in their name also misrepresenting facts themselves. Why?
Why not simply tell Kier Highways – ‘comply with the contract and charge common ‘base rate’ (to a TP and us/HE) plus an uplift of 25.29% as agreed’?
What was the point of agreeing the 25.29% uplift on base rates or actual costs, if it was never to be used? Two possible answers come to mind:
- There is corruption
- Highways England is not in control
Both could be the actual answer however, I have no direct evidence of ‘a’ but there is an awful lot of money at play. It appears ‘b’ is the case – that the strategic road network (SRN) is in the hands of contractors, that the tail wags the dog.
If, as it appears, the Authority has lost control, if they are so compromised as to be ineffective, there is cause for concern. For example, is the Smart Motorway project being progressed because the Authority truly believes in the process or are puppet-master contractors pulling the strings?
Highways England Receive & Accept False Information
I have discovered Kier are submitting false information to Highways England about claims costs – why? An example can be found here; Kier present figures conveying a loss but which hide their profit (profiteering).
If there were no reason to submit false data, why does this occur and why has the Authority done nothing about it?
Profiting from Claims
I struggle with this aspect as the law seems to allow for the process albeit in an ‘open’ market. But that a Public Authority is looking to profit, or more correctly enable their contractor to do so from a claim does not sit well with the ‘serve the public’ ideal. Even the Authority appears to cite conflicting approaches:
On the one hand, the Authority will refer to ‘Godsmark’, a facet of which seems so straightforward and reasonable as to be obvious:
It would be odd if a tortfeasor was liable to Highways England for diminution in value of a damaged chattel in one sum if sued by Highways England itself and in a different sum if sued by Highways England via BBMM (contractor). https://www.englandhighways.co.uk/15-02-2018-derby-county-court-bbmm-for-highways-england/
In other words, there is a common base rate; a TP and HE are to be charged the same by Kier – a process Kier falsely states occurs but which they never adopted and which HE has failed to enforce.
On the other hand, there is ‘Coles’ that is seemingly so much more complicated but which Shakespeare Martineau (Corclaims – engaged by Highways England) solicitors obligingly explained:
‘The practice of inflating costs to make a profit when pursuing claims arising from non-fault accidents has been given the green light by the Court of Appeal and some fleet operators may choose to follow their example.’ https://www.englandhighways.co.uk/coles-v-hetherton-subrogation-ruling-creates-a-moral-dilemma/
The post on the Shakespeare Martineau website from which the above was taken, has now been removed – but the Public Authority’s approach, progressed by their lawyers, is clear
- All of a sudden recovering such [inflated] losses has become palatable.
- … the losses incurred as a result of non-fault accidents now represents a commercial opportunity, which they can take advantage of if they wish.’
Highways England appear to have embraced the process; take advantage and profit. The Authority could simply have directed Kier to comply with the contract, the basis upon which the contractor was appointed; charge base rate plus a claims overhead. But it appears there was never any intention for this to occur; from day-one Kier ignored the section, nether Kier nor the Authority made reference to it, Highways England did not enforce it and ‘coincidentally’ Highways England, whilst uploading the contracts, overlooked including the small section that protects drivers, fleets, hauliers or their insurers – Appendix A to Annex 23 https://www.englandhighways.co.uk/wp-content/uploads/2017/03/Area-9-Appendix-A-to-Annex-23.pdf
Rather than have Kier comply with the contract thus protecting those unfortunate enough to suffer a collision, spill or fire, in 2020 the Authority changed the contract (backdating to 01/2019) to assist Kier to present higher costs to drivers, fleets, hauliers or their insurers.
Do the DfT care? It appears not, that our concerns are simply dismissed, the DfT accepting of excuses without question:
- DfT response that the Authority’s lawyers are investigating
- Our explanation they are not
- DfT’s next further acceptance of HE’s explanation
- Our explanation the response is (again) incorrect